U.S. Postal Service stepping on toes of private businesses

With its government links, it has plenty of power — power that has the potential to be abused. We are seeing an example of that, and because it has a direct and negative effect on our business, newspapers, we have serious objections.

The USPS is showing favoritism to a direct-mail company and its parent. The umbrella company is Valassis Inc. The USPS is giving Valassis significant rebates — up to 30 percent — if it can divert advertising circulars from newspapers to the USPS for delivery.

It’s greatly hurtful to newspapers, and for some, already teetering on the edge due to declining circulation and ad revenue, the advent of new media and the struggling economy, this plan could be a death knell. That would leave even more communities without a trusted, everyday source of the happenings in their neighborhoods, their local governments and the world.

If we didn’t think that was important, we wouldn’t have been doing it — for the last 140 years.

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The USPS is trying to save itself. It is hemorrhaging money and has been for years, suffering from many of the same problems that newspapers have seen. We have supported giving it greater autonomy over its own finances — Congress tends to meddle, particular when it comes to things like retirement pensions.

But there has to be a line in the sand, and we’ve found ours. We don’t think a quasi-government agency, regardless of its financial requirements, should be allowed broad powers to have such a potentially grave effect on other businesses, which is precisely what their plan to pirate advertising inserts from newspapers.

There is a love-hate relationship with advertising, whether in the newspaper or in the mail. When advertising helps them find deals or shop smartly, they love it. When it doesn’t happen to scratch the shopping itch, they may not like it so much.

But most people understand advertising drives the economy and it brings other intangible benefits, like the paying the bill for news coverage that keeps communities informed.

But we also argue that advertising placed in a newspaper at least provides consumers with an additional product. They get the news. They choose to buy our product; the advertising comes with it.

There is little choice about which advertising circulars wind up in one’s mail. Most are unsolicited and useless to the recipients. But the postage is paid; the USPS gets its money; and, under the presented scenario, newspapers no longer have a reasonably level playing field on which to operate.

The Postal Service wants to pick winners and losers in the extremely competitive advertising world. It’s competitive on every level, local and national. Its rebates present an unfair advantage, especially to an organization within the government aegis.

And, not everyone can play the rebate game. Discounts can only go to national retailers. Newspapers can’t get the same discount for their mail; they can’t sign a single national contract. Nor can a small local business, a clothing store, a book shop, a hairdresser or a garage.

The deal is only for the big guys and for the USPS. Business is business, but the USPS is more than a little government — it exists to serve all of us. It shouldn’t be undercutting certain of its stakeholders — and every American and every American business can be included in those stakeholders.

But we have to ask ourselves: does America need a federally owned advertising service- one that can dictate rules to undermine services provided at the local level by newspapers like this one, often, in the case of advertising, for businesses that are also locally operated?